Fitch: Development Pipelines Accelerating for U.S. Equity REITs

martes 7 de octubre de 2014 11:20 GYT
 

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: Trends in U.S. Equity REITs’ Development Pipelines – Activity Accelerates here NEW YORK, October 07 (Fitch) Development pipelines are steadily filling up for U.S. equity REITs, with most subsectors increasing construction spending, according to Fitch Ratings in a new report. Overall, total development pipelines represented 4.8% of total undepreciated assets as of June 30, 2014, up from 2.6% as of Dec. 31, 2011 but still down from a peak of 7.6% as of 2007, indicating that development exposure remains manageable. U.S. REIT construction spending continues to rebound from the trough of 2009-2010, driven by improving economic fundamentals, strengthening occupancies and rents, and slowly increasing bank financing. 'Development is becoming viable in a number of markets and property types, which is notable given the challenging acquisition environment due to low cap rates,' said Managing Director Steven Marks. Development pipelines have historically been dominated by multifamily and build-to-suit opportunities. That said, the improvement in market vacancy rates is now driving demand across other sectors. 'The office and industrial sectors in particular are seeing sharp increases in development and redevelopment as building owners look to reposition properties to meet changing tenant and market demands.' Office property development pipelines grew 40% to $8.2 billion during the first half-2014, following a 5% gain the year prior. As of June 30, 2014, industrial development pipelines accounted for 7% of gross assets, while unfunded pipeline commitments increased to 2.8% of gross assets. One sector not likely to see much of an uptick in development is retail. Fitch notes that retail development pipelines have been slower to rebound because of more focus on redevelopment opportunities and the growth in e-commerce. 'Technology is enabling merchants to get by with much less inventory, forcing retailers to scale back on space,' said Marks. Fitch's 'Trends in U.S. Equity REITs' Development Pipelines - Activity Accelerates' report is available at 'www.fitchratings.com' or by clicking on the below link. Contact: Boris Alishayev Associate Director +1-212-612-7880 Fitch Ratings, Inc., 33 Whitehall Street, New York, NY 10004 Steven Marks Managing Director +1-212-908-9161 Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com. Additional information is available at 'www.fitchratings.com' ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.